Amp Energy

Focusing on greenfield development to expand organically

Headquartered in Canada, Amp Energy is a renewable energy infrastructure manager, developer and owner. The company has built a global name for itself in the 10 years since its inception in 2009, spreading its operations across North America, Japan, India, Australia and Europe. It has a total clean energy portfolio of 3 GW worldwide, comprising commissioned as well as under-construction projects. Amp Energy started out with rooftop solar projects. Later, in 2013, it scaled up its operations to implement utility-scale projects. It entered the UK market in 2014 through an Apollo-backed joint venture (JV) targeting utility-scale and distributed solar projects. This JV develops, builds and secures debt financing for a large 140 MW portfolio of solar generating assets across the country.

To further expand to the leading renewable energy countries of the world, Amp Energy decided to set up operations in the US, Indian and Japanese markets in 2015. In 2016, it entered into an equity investment agreement and JV with CBRE Caledon to deploy $140 million in late-stage development assets in Japan, the US and India. In 2017, it decided to enter the Australian market. In 2018, the company commissioned its first 200 MW capacity in Japan and raised a $150 million warehouse facility with Zoma Capital to fully fund development and acquisition assets in Japan, the US and Australia for 900 MW of capacity. Moreover, the company launched Amp X, its proprietary digital energy platform for asset management and optimisation, and aggregation of flexible generation. By 2019, Amp Energy had deployed $2 billion of capital and developed 1 GW of assets globally, of which 300 MW are in India.

Experience in India

Amp Energy entered the Indian renewable energy market in 2016. For the first three years of its operation, it primarily focused on commercial and industrial (C&I) customers. According to Pinaki Bhattacharyya, co-founder and chief executive officer, Amp Energy India, “We initially focused only on C&I and government projects, as it is a B2B business that requires relationship building, which takes more time. In contrast, the utility-scale business is dependent on bidding and does not require too much time to build.”

As of today, the company sells solar power to more than 40 C&I and government clients. It has a total portfolio of around 1 GW spread across 15 states, comprising commissioned as well as under-implementation projects. Its customers include leading players from sectors such as pharmaceuticals, automobiles, cement, steel, FMCG, infrastructure, heavy industry, educational institutions, hospitals, utilities, IT and telecom. Its diversified client portfolio includes players like Tata Hitachi, Hero Cycles, Hewlett-Packard, AB InBev, Britannia, L&T Metro Hyderabad Rail, Kochi Metro Rail Limited and Skoda Auto Volkswagen India Private Limited (SAVIPL).

In January 2020, AMP Energy India commissioned an 8 MW solar project to supply power to L&T Metro Rail Hyderabad on an opex basis under a 25-year power purchase agreement. In December 2019, Amp Energy set up an 8.5 MW rooftop solar project at SAVIPL’s Chakan-based facility. This project will help meet up to 15 per cent of the site’s annual electricity requirements. Apart from developing rooftop solar projects, Amp Energy has increased the scale and size of its open access projects. In fact, about 80 per cent of the company’s portfolio in India comprises open access projects while only 20 per cent share is contributed by behind-the-meter projects.

The company also has a large solar capacity under implementation. In 2019, it commenced the construction of a 120 MWp open access solar power project in Uttar Pradesh at an estimated investment of Rs 5 billion. Post commissioning, it will be one of the largest open access solar energy projects in the state. The company is constructing another 120 MWp open access solar project in Haryana at an estimated investment of Rs 4 billion. The project will supply power to high creditworthy C&I consumers.

Future plans

Amp Energy aims to develop 2 GW of clean energy capacity in a span of three years. Instead of focusing on one particular segment, it intends to be an independent power producer with a balanced portfolio of C&I and utility-scale renewable projects. In February 2020, Amp Energy won 100 MW of capacity in the 1.2 GW Tranche VIII solar auction conducted by the Solar Energy Corporation of India (SECI) for ISTS-connected projects. The other winners in the auction were SBE Renewables Fifteen Private Limited (SoftBank), Eden Renewable Alma and ReNew Power. The company had quoted a tariff of Rs 2.50 per kWh.

For now, Amp Energy is focused on greenfield development in the renewable energy segment, and is not acquiring new assets unlike many players. In addition, the company is planning to develop wind and energy storage solutions for a diverse range of projects. “Amp Energy already has experience of installing energy storage projects in North America and intends to use this benefit of knowledge sharing among different geographies. We intend to develop both small behind-the-meter projects as well as large utility-scale energy storage projects. However, we feel it will take another year for energy storage to become commercially viable in the country,” says Bhattacharyya.

Amp Energy does not have any wind power capacity in India, but it will start developing wind assets this year. It has already identified various wind sites in the country and plans to supply wind power to both C&I and utility-scale customers. According to Bhattacharyya, “The wind industry has many problems on the supply side that need to be sorted. Unlike solar, wind power development requires a great deal of expertise on the manufacturing side. Moreover, there has been a huge backlog in terms of capacity development since the SECI-III wind auction due to various issues. Thus, we believe that wind power will be a part of our portfolio only from the next year onwards.”

To implement the huge planned capacity in India, Amp Energy is backed by a group of institutional investors from Japan, Canada, India and Europe. In fact, in January 2020, LGT LightstoneAspada announced its plans to invest up to $50 million in Amp Energy’s India unit for a long duration. Its lenders include a host of private and public banks, NBFCs and foreign institutions.

Challenges and the way forward

Amp Energy’s lenders have strict requirements like the company will cater to only Tier 1 C&I customers that have good ratings and minimal payment risks. In the long run, this can restrict the potential market for the company, especially as the competition is quite aggressive in the C&I solar segment partly due to the entry of large players. Moreover, the company has only four years of experience in the Indian energy market, whereas its competitors have been operating in the country for a longer time. While aware of the challenges, the company’s management believes that the Tier 1 customer base is quite large and will not exhaust soon. In addition, the company is open to doing business in many states unlike its various competitors, making it a more accessible developer.

With discoms not willing to let go of their high-paying C&I customers and creating regulatory hurdles, it is better for a company like Amp Energy to foray into other renewable energy segments as well. It has already started moving in this direction and though originally focused on delivering clean energy to C&I customers, it is now diversifying into large utility-scale projects. In this space, the company is likely to face stiff competition from GW-scale players that have years of experience in India’s utility-scale renewable energy market. Some of these players have also forayed into the transmission space, which makes it certainly easier for them to capture capacity.

Amp Energy has emerged as a winner in its first-ever utility-scale solar auction, which has certainly positioned the company as a key player. “Not adopting the strategy of aggressive capacity additions, the company is in favour of expanding steadily. It aims to deploy affordable and innovative technology solutions for greenfield development of its assets,” says Bhattacharyya.

Overall, Amp Energy is well on track to becoming a renewable energy IPP with a multi-GW portfolio in India, provided it continues to diversify and evolve according to the changing market dynamics.